The bondholders of Starling Advanced Communications want specifications on how Starling plans to repay them.

The bondholders of Starling Advanced Communications don't want speeches, they want specifications. Specifically, they want to know how Starling plans to repay them.

Starling is a subsidiary of Elron - which belongs to Nochi Dankner's IDB group - Elbit Systems and the Rafael armaments development authority.

"Don't talk to us in slogans. Tell us how you're going to repay the money," one holder of Starling's convertible bonds said at an assembly yesterday. "At the end of the day you have to pay based on numbers, not talk."

Nor were the bondholders charmed by the transaction Starling reported in July. A satellite communications provider chose Starling to supply antennas in what could prove to be a $60 million deal. But it isn't a done deal yet: The whole thing remains contingent on the communications company closing its own deal with an international telecoms operator.

In any case, the Starling aspect of the transaction isn't likely to materialize before December and didn't soothe bondholders' nerves at the meeting yesterday, which was held at the offices of Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.

Starling today is chaired by Israel's former chief of staff, Dan Halutz, who resigned from the army after the Second Lebanon War. The company develops antennas to transmit broadband communications to planes.

It went public in June 2007, and not easily at that despite having some superstars among its shareholders. Investors were edgy about the company, which also sported a going-concern warning in its books and a shareholders-equity deficit. It issued NIS 42 million worth of bonds and NIS 10 million in stock.

At the time, to reassure jittery investors, Starling not only promised relatively high interest on its bonds. It also undertook that if within 18 months it wasn't chosen to supply more than $50 million worth of systems, it would allow holders of its convertible bonds to redeem them at the ratio between the announced scope of contracts, and $50 million. Starling also placed money in trust to cover its pledge.

The 18 months end in December, and until the deal announced in July, it had no contracts to show. But then, as said, it reported the antennas deal that could be worth as much as $60 million. Hence bondholders are a tad nervous.

"We know how to read a presentation in Hebrew," Arik Sikersky, one of the bondholders, snarled at management. Sikersky owns about 1.2% of the bonds. "You said back at the initial public offering 'We have the contract and that's why we need the money,' and to date there's no contract win, no nothing. Meanwhile you're bleeding the bondholders and trying to gain time."

The chief executive, Micha Lawrence, answered: "I know that the reportage on the deal is vague, but we can't give more details. If we do we'll lose the deal. We can report only when it's signed."

To which Sikersky said: "One of the things that a controlling shareholder does is put his hand into his pocket and soothe the public. Let Nochi Dankner provide a personal guarantee that he'll pay the bonds."

The bondholders also demanded that the company explain exactly how it plans to repay the bondholders through anticipated inflow.

Management answered that it couldn't give details on profit rates if it doesn't know them yet and if the deal isn't closed. The trustee chimed in: "A company should have a plan for revenue inflow over two to three years."

The assembly ended with a decision to reconvene next week, when management will have to come up with answers.

Sikersky had formerly served as an adviser to Clal Underwriting, which led Starling's IPO. Clal Underwriting also belongs to Nochi Dankner's business group. During the offering, Sikersky decided to buy Starling bonds on his own behalf. Starling claims that Sikersky and other bondholders have an interest in claiming the money in trust immediately, instead of waiting for the deal to be signed.

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